PITCHFORKS COME OUT AS CHINESE BUST KLEPTOCRATS

Unlike in the West, being a kleptocratic crook in China is now becoming a higher risk proposition. One gets the sense that as the credit monster collapses in China, and as auntie’s wealth management product is shown to be a loss, out will come the pitch forks. Seizures, arrests and even executions will become the order of the day.

It is not too difficult to understand how these kleptocrats stuffed an estimated $1 to 4 trillion into overseas banking accounts, which I’ve dubbed “the ratline.” In the real estate part of the equation, first corrupt local officials seize the land of farmers. The windfall extraction occurs when the land is effectively rezoned for constructing ghost buildings and cities. Then, in an greatly expanded version of the U.S. savings and loan fraud of the 1980s, cronies in Chinese banks make shady loans to “developers.” In turn, the developers throw up pie-in-the-sky projects. It’s a facade to collect fees and soft dollars, leaving the largely unsecured debt to be dealt with by other cronies and friends in government. The end result of this loot and extraction is aptly described by David Stockman in ”China’s Monumental Ponzi.”

The story around the Zhou racket is illustrative: “Chinese authorities have seized assets worth at least $14.5bn from family members and associates of retired domestic security chief Zhou Yongkang, who is at the centre of China’s biggest corruption scandal in more than six decades, according to Reuters news agency. More than 300 of Zhou’s relatives, political allies, proteges and staff have also been taken into custody or questioned in the past four months.”

As some examples, such as Li Peiying, are executed and the Chinese economy implodes, it is even more imperative for kleptocrats to get their ill-gotten gains and banal personas into the global offshore ratlines.

In recent years, one of those ratlines was in Canada, but that country has grown weary of the inflated, high-end real estate bubble prices and the behavior endemic of kleptocratic criminals and decided to pull the plug [see South China Morning Post] on its investor visa scheme. More than 45,500 waiting in the queue will need to seek other destinations aka refuge.

One of those new locales is the U.S., where wealthy Chinese are lined up for green cards. One of the planted promotional ploys that these Chinese kleptocrats are using is a scam making the rounds that they “are investing in Detroit.” To the average American, that sounds like a prospect for urban renaissance. However, the reality indicates this is a falsehood and a red herring [see NPR's "Chinese Investors are Not Snatching Up Detroit Property"].

Until recently, details surrounding the secretive Chinese offshore ratline story have been widely speculated upon but remained largely unknown. Files obtained by the International Consortium of Investigative Journalists (ICIJ) reveals that nearly 22,000 offshore clients with addresses in mainland China and Hong Kong appear in a cache of 2.5 million leaked files.

Among them are some of China’s most powerful men and women — including at least 15 of China’s richest, members of the National People’s Congress and executives from state-owned companies entangled in corruption scandals.

ICIJ has the details on a number of Chinese ratliners in its highly revealing article. In my view, this investigative journalism is right up there with Edward Snowden’s revelations. In some cases, these corrupt players are already serving jail time in China as their loot sits in offshore accounts. The case of Zhou Zhengyi is illustrative.

Pricewaterhouse Coopers, UBS and other western banks and accounting firms play a key role as middlemen in helping Chinese ratline clients set up trusts and companies in the British Virgin Islands (BVI), Samoa and other offshore centers. ICIJ report states: “Tax Justice Network, an advocacy group, says BVI offshore entities have been linked to ‘scandal after scandal after scandal’ — the result of a corporate secrecy regime that creates an ‘effective carte blanche for BVI companies to hide and facilitate all manner of crimes and abuses.”

The BVI, in turn, ties in as a money source for international banking cartels operating out of the City of London in particular. That cozy arrangement between Chinese kleptocrats and offshore bankers thereby germinates other loots and speculative bubble-blowing activities. Who says crime doesn’t pay.

Local town had a racket that fell apart massively. regarding the former George AFB and power generation. They started marketing visa's to rich chinese using the money to do many things not particularly part of the power plant project.

This sudden unmasking of the perpetrators smells a lot like scapegoating. Throw a few local Jefes to the wolves. Maybe capital controls coming to halt the flight? After the insiders have their Yuan safely out, of course.

Crypto-currencies in general are more and more looking like a safe haven for liquidity....

Think of it this way when everything goes tits up you still have an anonymous accounting record of who is owed what and you know one of those currencies will recouple in valuation with something else tangible in the next setup along with at least one safe haven for the bigger liquidity players to cash out afterwards...

It is an ecosystem. Not all the currencies prices fluctuate directly with bitcoin. I am not recommending any particular one but an inflationary in nature coin worth under a penny you could dump a few million in liquidity sloshing around the system with no outlet to spend it on and it wouldn't move one way or the other in price fluctuation or affect bitcoin in anyway whatsoever... Then you can figure out how to trade it within the eco-system to maximize and cash out somewhere else in a different type of paper.

There is alot of liquidity sloshing around that is going to get corzined once the shtf and liquidity like electricity will flow to the path of least resistance for everyone who has a lot of it to lose who isn't in the club when they are next up on the ass rape menu to keep the ponzi going. I'm sure Iceland would welcome the liquidity into their economy through auroracoin or maybe if Catalonia breaks away and can hold it Spaincoin might rocket up and be a conduit to syphon liquidity from one ecosystem to the other. There are a lot of options and decentralized exchanges online now like Nxt, Mastercoin or even Reggie's Ultracoin to move things around. These things are a lot more versatile than just serving as currency, they also can serve as contracts like how Nxt works where you buy not only a contract but it is used to fund projects like crowd funding with being able to buy a share in said company or project up front to sell at a profit later on.

You can bet on the paper, I'll bet on the fact that the system is decentralized and not tied to the banks and that it will be standing after the shtf and in turn will recouple and value accordingly to something of value after everyone gets wiped out in the banking system.

You'd be stupid to not have some position somewhere in the ecosystem if have you more liquidity than you can protect by buying assets like property and metals and not enough to not be on the menu as the old system starves and goes nuts as it dies.

In some places that might be true but it won't be the whole world regardless of what the Mad Max fantasy fetish types think. This is going to be a staggered crisis with the early defaulters being the big winners as the rest of the thing burns.

Wait until they perfect these 'reward' coins that pay interest on just holding them. Just wait until those can guarantee interest rates comparable to savings accounts, money market accounts or bonds.

Go west young man. It's a libertarian paradise. The officials are so easy to work with. Just grease a few palms. They're catching on great. An amazing deregulated capitalistic paradise. Ayn would be proud. We're getting the world we always wanted. There's no environmental restrictions, no unions, workers can be locked up and worked 18 hours a day. If one gets sick just ship 'em out and stick a new hayseed farmer in his place. See!

You don't seem to have gotten much out of Atlas Shrugged, assuming you even bothered to read it. You also haven't a clue about (L)libertarians cuz you would have known that they prefer to have as little to do with "officials" as possible, unless they are returning them to the private sector because their agencies have been terminated and their congressional justification repealed. Ragnar the pirate and Francisco d'Anconia preferred to interact with "officials" with guns blazing. Our current economic environment isn't free market capitalistic (laissez faire), it is a socialist mercantilist system breeding the elites that all socialist systems are noted for (after all, somebody has to be the big cheese(s) when you are ruled by "philosopher kings" who want to stay in office).

When ever my up arrow count goes too high I always poke at the ignorant Libertarian True Believer Fanatic Cultic Goat Cock Licker Glare Eyed Repressed Homersexual Weiner Eater Robotic Tools. They can always be relied on to spring out of the wood pile when ever you say "Ayn Rand" as she reminds them of their heartless mother who hated them, and rightfully so.

Today is their last day to make the grade. Please, the Universe knows you are there with a great big huge heart that has a pocketbook to match it. Will you please finally shift gears and make that magnanimous donation to save this truth telling network. Ben Swann just finished his two hours, and now comes Mike Rivero, then John Stadtmiller at 4:00 central time. Please do the right-up thing and donate now. Dig deep!!

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Thank you in advance for your serial consideration of this urgent appeal to you ALL.

So what now? Are we now supposed to hope for a Chinese takeover of the US so that they clean up the US kleptocrats? I am all for it if the Chinese come in, get rid of the kleptocrats and then go away again.

However, my guess is that just like when DICK Fuld got his Lehman kleptocracy taken away by the other kleptocrats it is only out of favor kleptocrats, who most likely did not lick the right boots, who NGO whipped peasants are presenting with pitchforks. The kleptocrats in power are most likely enjoying making their former compadre squirm.

We need a world wide 'prove it" event. Prove that the asets you have were obtained on the up and up or you lose them. Won't cooperate, then the army is coming for you. This si something I hope to see in my lifetime.